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CPE Session: Ethics Education Boot Camp An Alternative Course: Information, Ethics and Society James Gaa University of Alberta July, 2010.

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Presentation on theme: "CPE Session: Ethics Education Boot Camp An Alternative Course: Information, Ethics and Society James Gaa University of Alberta July, 2010."— Presentation transcript:

1 CPE Session: Ethics Education Boot Camp An Alternative Course: Information, Ethics and Society James Gaa University of Alberta July, 2010

2 My Objectives 1.To describe briefly my ethics course as an alternative to a more conventional course in accounting ethics 2.To introduce some ideas developed in this course that apply to accounting ethics Concepts – good definitions are critical Theory Issues 2 Ethics Boot Camp -- Information, Ethics and Society

3 Structure of Presentation 1.Basic introduction to the course Why have such a course? General description of this course 2.Some basic ethical concepts that are central to information issues Rights / duties Privacy / secrecy Lying / deception 3.Structure of the course (time permitting) 3 Ethics Boot Camp -- Information, Ethics and Society

4 SEC Press Release Re. Dell Computing Accuracy and completeness are the touchstones of public company disclosure under the federal securities laws. Robert Khuzami Director, SEC Division of Enforcement July 22, 2010 The Fundamental Issues: Corporate governance Disclosure versus Secrecy (information asymmetry) Disclosure of accurate (representationally faithful) information More generally: Rights and Duties of Management and Stakeholders Ethics Boot Camp -- Information, Ethics and Society 4

5 Why Information Ethics? Accountants are supposed to be experts in information and the process of disclosing information to others Information ethics gives freedom to look at broader issues, social context of information Whats unique about accounting? Auditor independence Anything else? 5 Ethics Boot Camp -- Information, Ethics and Society

6 My Course Basic Facts Title: Information, Ethics and Society – first taught 2002 Place in the curriculum – an elective One of a set of required electives for accounting, MIS, Decision Science majors General elective for other business majors Covers all main areas of business 1 ½ weeks is specifically about accounting Earnings management 6 Ethics Boot Camp -- Information, Ethics and Society

7 My Course Basic Facts Lecture/discussion sessions 10 long case discussions Mix of issues By business area: marketing, MIS, HR, finance, accounting Non-disciplinary: intellectual property Micro (individual decision) / macro (policy issues) International/domestic Codes of conduct of various professions 7 Ethics Boot Camp -- Information, Ethics and Society

8 My Course Basic Facts Course is fully subscribed Open to all business majors But accounting majors have priority So, who takes the course? Primarily, accounting majors – very limited space for others Students dont mind that it is not accounting-centric Could be an issue for some state boards of accountancy 8 Ethics Boot Camp -- Information, Ethics and Society

9 Relation to Traditional Accounting Topics Included: Confidentiality Earnings management Responsibilities regarding deception Excluded: Auditor independence Billable and non-billed hours Professional-organizational conflict (except in passing) Budgeting Transfer Pricing 9 Ethics Boot Camp -- Information, Ethics and Society

10 Basic Unifying Concepts Rights and duties Focus on Hohfeldian rights theory Claim-rights (one kind of right) have correlative duties Not: Kantian duty theory Privacy Unwanted attention Control of information Discussion of both in ethics and law 10 Ethics Boot Camp -- Information, Ethics and Society

11 Information, Ethics and Society11 Structure of Rights (Hohfeld) Active RightsPassive Rights First-order rightsPrivilegesClaims (claim-rights) Positive or negative In personam / in rem Second-order rightsPowersImmunities Negative

12 First-Order Rights: Claim-Rights Claim-Right: An enforceable claim to the action or non-action of others A claim against someone else Who has a correlative duty to act or not to act In personam: the duty is of a specific person e.g., individual accountants to keep certain information of employer/client secret In rem: the duty is general e.g., professional assocations to create and enforce standards of ethical conduct 12 Ethics Boot Camp -- Information, Ethics and Society

13 Molecular Rights Most real-world rights are really bundles of atomic rights I.e., complex combinations of Privileges Claims Powers Immunities 13 Ethics Boot Camp -- Information, Ethics and Society

14 Fiduciary Duty Fiduciary duties consist of: Duty to act in the interest of the beneficiary The beneficiary has a positive claim-right that the fiduciary act in the beneficiarys interest Duty to avoid acting in ones self interest The beneficiary has a negative claim-right that the fiduciary will not act in the fiduciarys interest 14 Ethics Boot Camp -- Information, Ethics and Society

15 Two Basic Domains of Privacy 1.Privacy as related to dignity, autonomy, relationships among people Includes privacy as unwanted attention A major concern of early work on privacy In wake of technological advances: Photography, sound recording, printing Information issues often arise due to new technology Still a major issue 15 Ethics Boot Camp -- Information, Ethics and Society

16 Two Basic Domains of Privacy 2.Privacy as restricted access or control Especially control over information collection, retention, use, security, disposition Important: Privacy is not restricted to information Private property is private in just this sense 16 Ethics Boot Camp -- Information, Ethics and Society

17 Confidentiality A claim-right to keep information concealed (secret) So, someone else has a duty to keep a secret Duty to keep a secret – examples Employees: duty of loyalty Professionals: codes of conduct usually include a duty of confidentiality Important: this duty is limited (except for accountants) 17 Ethics Boot Camp -- Information, Ethics and Society

18 Privacy and Related Concepts Privacy: Having control over something (including information) Right of privacy: Right to control something (including information) Anonymity: Given, written, etc., by or about a person whose name (or other identifying information) is withheld Secrecy: Information blocked intentionally from others Confidentiality: Concerns the right to maintain secrecy Privilege: Legal right/duty to preserve confidentiality of information/ communication 18 Ethics Boot Camp -- Information, Ethics and Society

19 Application to Accounting The fundamental problem of financial reporting is: The disclosure of private information to outside stakeholders Private information: Initially, controlled via secrecy When disclosed, control is lost Conflicting Rights: The organization (to disclose or keep secret) Stakeholders (to have information disclosed or kept secret) 19 Ethics Boot Camp -- Information, Ethics and Society

20 Deception and Lying Deception: The communication of messages (by the deceiver) to others (the deceived) with the intention of misleading them To mislead: to cause other people to believe what the deceiver does not believe or to act in ways they would not have acted Lie: an intentionally deceptive message which is stated (i.e., written or oral) 20 Ethics Boot Camp -- Information, Ethics and Society

21 Course Structure I.Ethical concepts and principles II. Privacy III. Secrecy and confidentiality IV. Intellectual property V. Deception and lying 21 Ethics Boot Camp -- Information, Ethics and Society

22 I. Ethical concepts and principles: the standard ethical theories Consequentialism Duty-based theory Rights theory Virtue theory 22 Ethics Boot Camp -- Information, Ethics and Society

23 I. Ethical concepts and principles: Rights and Duties Heavy emphasis on rights and duties Why: most of information ethics is about rights of various kinds Rights to privacy Intellectual property rights Right to confidentiality Right not to be deceived 23 Ethics Boot Camp -- Information, Ethics and Society

24 II. Privacy Primary issues: Rights to privacy of personal information Customer privacy Employee privacy Encompasses ethics and privacy laws – personal privacy including the relationship between ethics and law 24 Ethics Boot Camp -- Information, Ethics and Society

25 III. Secrecy and Confidentiality Issues: Trade secrecy One way of protecting intellectual property I.e., controlling information Competitive intelligence / espionage Leaking and Whistle blowing Legal Privilege 25 Ethics Boot Camp -- Information, Ethics and Society

26 IV. Intellectual Property Focus: patents and copyrights Includes law and ethics Issues: What should be patentable? copyright law and creativity: alternative structures Uncompensated copying of copyrighted material 26 Ethics Boot Camp -- Information, Ethics and Society

27 V. Deception and Lying Issue areas: Negotiation Marketing Business valuation Earnings management and fraud in accounting Assurance standards / codes of ethics 27 Ethics Boot Camp -- Information, Ethics and Society


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